Cen­tre freezes im­port of com­pletely built A/C units


New Delhi, Oc­to­ber 16

To pro­mote do­mes­tic man­u­fac­ture, the Cen­tre has banned the im­port of com­pletely built units air-con­di­tion­ers with re­frig­er­ants.

Air-con­di­tioner im­ports have been on the radar of the gov­ern­ment for some time and has been iden­ti­fied as among the pri­or­ity sec­tors where im­ports can be re­duced, in line with the gov­ern­ment’s Self-Re­liant In­dia ini­tia­tive.

Crit­i­cal com­po­nents

The Cen­tre’s move is ex­pected to give a boost to ca­pac­i­ties ded­i­cated to third-party man­u­fac­tur­ing in the coun­try.

How­ever, ex­perts pointed out that most com­pa­nies that make ACs in In­dia rely heav­ily on im­ports for crit­i­cal com­po­nents such as com­pres­sors from China.

The AC seg­ment has a large num­ber of play­ers and sev­eral brands rely on im­ports not only from China but also from Thai­land, Viet­nam and Malaysia with which In­dia has free trade pacts.

Ac­cord­ing to a DGFT no­ti­fi­ca­tion, im­ports of all types of split and win­dow air­con­di­tion­ers with “re­frig­er­ants” have now been moved to the ‘pro­hib­ited’, from the ‘free’, cat­e­gory.

Ac­cord­ing to in­dus­try es­ti­mates, com­pletely­built im­ported units ac­count for about 30 per cent of the air-con­di­tion­ers seg­ment. The to­tal num­ber of air-con­di­tion­ers sold in In­dia an­nu­ally is over 65 lakh units.

‘Right di­rec­tion’

Pradeep Bak­shi, Man­ag­ing Di­rec­tor & CEO, Voltas Ltd, said, “This is a step in the right di­rec­tion and will give a boost to do­mes­tic man­u­fac­tur­ing of air­con­di­tion­ers. The Gov­ern­ment had been in dis­cus­sion with the in­dus­try on this is­sue for some time now. Sev­eral brands have been im­port­ing ACs through the FTA route. So, this will pave the way for ramp­ing up the man­u­fac­tur­ing ca­pac­ity of air-con­di­tion­ers in In­dia. At the same time, we must also fo­cus on strength­en­ing the com­po­nent ecosys­tem of ACs in the coun­try.”

Over the past few years, lead­ing in­ter­na­tional and In­dian com­pa­nies have been heav­ily in­vest­ing in cre­at­ing man­u­fac­tur­ing ca­pac­i­ties in the coun­try. Vi­jay Babu, Vice-Pres­i­dent (Home Ap­pli­ances, LG Elec­tron­ics In­dia, said that the “en­tire line up” of the com­pany’s ACs are made in In­dia and the com­pany “will con­tinue to in­vest in man­u­fac­tur­ing fa­cil­i­ties”.

Level play­ing field

Kan­wal­jeet Jawa, CEO and Man­ag­ing Di­rec­tor of Daikin In­dia, said, “This will en­able a level play­ing field for play­ers that have in­vested in set­ting up man­u­fac­tur­ing fa­cil­i­ties in the coun­try. We are al­ready ex­port­ing ACs to sev­eral mar­kets. With the pen­e­tra­tion of ACs in sin­gle dig­its, this seg­ment has a huge growth po­ten­tial.”

Manish Sharma, Pres­i­dent and CEO, Pana­sonic In­dia and South Asia, also said the com­pany has been ca­ter­ing to do­mes­tic de­mand and ex­port­ing ACs from its fac­tory

The gov­ern­ment’s move is ex­pected to give a boost to ca­pac­i­ties ded­i­cated to third-party AC man­u­fac­tur­ing.

in Haryana.

“We cur­rently ex­port air-con­di­tion­ers from In­dia to SAARC, West Asia and Africa. Re­cently, we also an­nounced our in­ten­tion to share Pana­sonic’s man­u­fac­tur­ing tech­nol­ogy and help se­lect com­pa­nies man­u­fac­ture re­frig­er­a­tors and ACs re­duc­ing de­pen­dency on im­ports and driv­ing the ‘Make in In­dia’ agenda,” he added.

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